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tv   Squawk on the Street  CNBC  January 30, 2013 9:00am-12:00pm EST

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welcome back to "squawk box." let's guest to our guest hosts, dan and ed, for the last word. is this the new normal? is the new normal down or up,
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given what we just saw on the gdp? >> i think the new normal is the old normal. stock give you pretty good turns, especially on top of inflation. stocks are going to be once again a big part of people's portfolios. >> you have a right to be cautious. i only need one number to put you back in -- >> now -- we talked about this last time. i was going for slower appreciation. >> guys, thank you very much. that does it for us today. right now it's time for "squawk on the street." good morning to you all. i'm melissa lee, along with jim cramer, david faber at the new york stock exchange. carl quintanilla is live where research in motion is holding their blackberry 10 launch today. let's look at futures and how we're setting up for the day.
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we saw a bit of a reversal on the gdp numbers, the first contraction since 2009. now we're in negative territory. as for europe, confidence coming in stronger in the real star here. the euro topping 135 for the first time since april 2010. and strengthening even more after the gdp release. overnight in iasia, the nikkei p from 2010. the road map starts with the markets. today may be the day some milestones are hit. we're just about 2% away from dow 14,000. a level we have not traded above since october 17th, 2007. the s&p 500 less than 4% below its october '07 record high. can the bulls overcome the news of the surprise contraction in gdp. >> anticipation building, at least certainly here for research in motion. that being the blackberry 10, will it be enough to sustain the
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run. we'll take a look. >> amazon shares rocketing higher this morning. investors looking past the revenue and weak guidance, focusing instead on the gains in operating in gross margins. shares are set to open at record highs. >> look at chesapeakchesapeake,d of directors announcing the founder retiring in april. >> we do begin with a stunning gdp report. the economy contracted to 0.1% in the fourth quarter. first decline since 2009. this as we remain on dow 14,000 watch. the index is fewer than 46 points away from that mark. which hasn't been reached since october 2007. the dow component boeing rising pre-market. it earned $1.28 a share in the fourth quarter, beating wall street estimates. it expects no significant impact from any faa directives
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involving its 787 dreamliner, and is maintaining its production and delivery forecast. let's get to the gdp number. it is apparent that the economy came to somewhat of a screeching halt in the last two months of the year. >> i think cnbe played a big role. i'll calis a one off number. the reason i call it a one off number is there are way too many companies who reported during this period that did not see this level up -- well, let's just say no growth whatsoever. >> decline. that being said, it may be a one off, but it's still a bit surprising, if not scary. >> well, does it not say that the fed's been right in what it's been doing. >> it does. it does. and again, sandy, we talked so often about consumers pulling back. although that doesn't necessarily appear to be where a lot of this was. >> yeah, sandy, the government -- sandy destroyed $8.6 billion in government
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property. also, the drought hitting the midwest. that could have had an impact in this number. fed spending saw the largest drop since 1973. that was down 6.6% in the fourth quarter in the trade. exports were down by 5.7%. all this combined led to this contraction in gdp. >> i think if you base any investment decision on this, you should have shorted this market. because when you have no growth market, what are you doing with caterpillar? why does caterpillar keep going higher? cater piller should be at 70 if this is a real number. >> shouldn't you add a little caution perhaps to your equity market at this point, jim? front page of the journal today, individual investors, finally getting in there. shouldn't you at least say, okay, i don't know. it may be a one off. you may be absolutely right. but we're approaching all toech
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highs. i've got a lot of different factors to consider here. this is not what i'm looking for. if economic growth does slow in the first half of this year, whoa. >> the individual investor initially will be taken aback if the fed says we don't need to stay easy. that will cause a sell-off. i'm not going to disagree. i'm just saying, the stocks are saying that this was not a true number. >> yeah. and for as many weak spots in the number, there were bright spots. retail sales in the fourth quarter were strong. housing, it was up -- spending on housing, home improvement, up 15.3%. the seventh consecutive gain. business inventories up 8.4%. if there's one reason to be a little more on the skeptical side, is consumer confidence came in weaker yesterday. maybe it's sort of catching up. obviously something to watch. >> the big numbers are bad. the macro numbers have been a terrible place to look at, except for the employment
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numbers. the weekly claims have verified the stock move. but really, the only macro number that is verified in stock, the only one. >> does this heighten focus in anticipation for the various economic numbers we're going to be getting over the next month or two? >> the fed statement this afternoon. >> we're in a difficult moment. if the fed is too easy, all these people who come on the kneltwork and say the fed is too easy, i don't know. i can point to the gdp number and say, you're wrong. we'll say, what are they nuts? did you see that gdp? the fed has been nuts at certain times, we know that. >> they've been wrong at certain times. and you've been r50i9. put that in your pipe and smoke it. >> it's a shocker. it's as much of a shocker as the fact that china's come back. it's as much of a shocker to say that europe's come back and
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stabilized. the line i'm seeing over and over again with the exception of ford yesterday. >> you know, about an hour from now, if you haven't heard, research in motion is going to officially unveil its blackberry 10. it comes at a critical time for r.i.m. in anticipation of the blackberry 10 unveiling, shirsz of r.i.m. doubled over the last three months. coming from a very, very low base. but so far this week, stock down by about 12%. our own carl quintanilla is joining us from lower manhattan, i believe, where this event is going to take place. correct? >> yeah. we're on south street seaport. how many times have we had the discussion at this table about when this device was going do come out. it's going to happen about 10:00 a.m. eastern time. we think we'll see two different models, the z-10, which is a
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touch-screen device, and q-10, but a lot of discussion will be about the new tool, something called hub, flow, and balance, where you can navigate between apps without having to go back to a home screen. the stock up 100% in three months. only 14% of the sale side has a buy rating. two years ago that number was 45%. and even though, jim, i don't want to make you talk any more than you absolutely have to, you have said this week that this is a make or break product. >> i think it is. i'll tell you why. because the erosion must be stopped. the unbelievable -- i know apple stock doesn't indicate it. the unbelievable share take by apple must be stopped right now. and i think these devices will cause a lot of the -- let's say the chief technical officers of the company say, all right, let's take a hard look before we switch out. >> it's not even apple or
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samsung. in terms of global market share, the top five, i mean, r.i.m.'s not up there, but zte is up there, along with samsung and apple. it's not just samsung and apple versus r.i.m. at all. it's r.i.m. versus everybody else. >> 79 million subscribers. >> market share for these guys, 5%. two years ago, 20%. i mean, a lot has gone on while they have been trying to get this thing ready. the question is, how much has android and ios taken out of the room. we will see. the presentation at 10:00. jon fortt has tried out the software and is relatively impressed. they'll not show their super bowl ad, so they say. we'll find out. jim, you are the ray lewis of our team today. you're playing hurt. you got the big brace on your arm, but this time it's your voice. you're amazing. >> san francisco, watch out.
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>> well, talk about missions, let's talk about amazon. set to open at new all-time highs. the online retailer is better than expected profit margins, that is the key story here. as we said earlier at the end of "squawk box," jim, keeping the dream alive, so to speak. they show they can deliver margins. the expectation is, the higher margin businesses will grow fast enough to offset the deceleration of certain other businesses. you end up with a higher earnings number into the future. that seems to be emboldening the others coming into the company. >> there's a big conference, tons of noninformation. but they have a line. cost of sales was 16.4. or 75.3 out of revenue. that's it. this stock is going up because of that one line. there's no other line that is
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that good. >> that is true. and right now, we are looking at amazon opening at fresh record highs. this is a stock that has just -- some may make the case that apple has been a source of funds for amazon, as money has come out of apple and gone into other beta names. but in terms of the hope for investors, amazon continuing its growth is here. getting closer to the customer, and lowering, by the way, the lowering of costs of transportation as the percent of total revenue. that is working in some sense. >> possible same day. the analysts are chomping at the bit to find things to be able to raise their price target. >> yeah. >> the company won't give you anything other than the fact that it apparently canw whatever number it wants. there are very few companies that can show whatever earnings number they want. >> right. you know, i don't look at it that often what the analysts have to say, or at least want to share it.
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a number of hedge fund managers at least say he had good calls on group-on. he said it should reach levels to sufficient live offset the suspected revenue deceleration. so that becomes the grounding for, i guess, what's an increase in the price target of $330. to your point, you look for reasons to say it's going higher. >> remember how much they loved apple. >> exactly. today, by the way, including that, six firms on the street raising their price targets. six of them. >> i have to admit that it is a juggernaut. there's no competition. >> right. >> no one is competing with amazon in the world. the world's their oyster. >> it's interesting, a great growth stock shows less growth in the top line than anticipated and still goes up 10%. >> it's aok. >> people use it. they love it. >> yeah. >> i don't use a competitor to
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amazon. do you ever go on the web and use others? >> i don't do shopping anyway. >> at all. >> no. >> third-party fulfillment numbers, obviously good. >> yes. >> this is a great question, was it -- i forget which guy, but there was this one moment someone said, isn't it true, that the gross margins are better than the stuff you fulfill? i said, we don't talk about that. can you imagine if tim cook, the cfo, will we talk about that? you want arrogance. this one is uberous. people like uberous from these guys. >> that's true. we're going to take a break now so jim can have a sip of tea. >> i'm sorry. i know. i feel better than i sound. >> at least that's good. we're glad to have you anyway. >> thank you. >> stocks rising on the news of chesapeake's retiring.
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another look at futures. it looks like we're backing away -- actually, look, we're in positive territory. points away from the 14,000 mark. all stations come over to mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers.
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natural gas provider announcing co-founder and ceo has agreed to retire from the company effective april 1st.
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mcclendon announcing philosophical differences. chesapeake says its review of conflict of interest involving mcclendon saw no conflict. they talked about the new board. >> is the company restrained enough for the new board members, many of whom, by the way, are people who very traditional backgrounds, and may not like the old wildcatting ways of your company. >> well, they certainly like the asset base that the old wildcatting ways gave us. exactly. look, i don't think you would have joined in board in june of 2012 if you weren't interested in what the company was doing, if you didn't like the asset base, if you didn't have some confidence in the management team at the end of the day. >> david, aubrey is being abject in telling me it was a true
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retireme retirement. >> i don't think that's really the case. my understanding is as recently as last week, at meetings with senior management of the company, he was not in any sense expected to do this. and in fact, he's communicated since with many of those officers and the like of the company that it was not in contemplation by them a week ago. my understanding is in fact, as you might expect, that there was a sense on the part of these large shareholders, being southeastern and icahn, that there was an aubrey discount for better or worse. and that the way to get rid of that discount was to get rid of mr. mcclendon. so while he did cite philosophical differences, in his communication, companywide. at the end of the day there was a potential push here from the large shareholders. so i've done a bit of reporting this morning, talked to a few people and can tell you that my
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sense is that's the case. kind of makes sense when you look at it. not hiring a search firm tat this point. he's 53 years old. >> it's his company. >> he founded the company. judging from some of the internal correspondence that i'm aware of, where he says it was not in contemplation by me a week ago. >> what's interesting is he truly did believe that this would be the year for natural gas prices to go up. it just looks like another year it will not happen. >> now you've got a number of analysts coming out, and i'm searching for one of those reports -- i mean, the stock up that much, is that discount disappearing, or could lead to the whole company being put into play or at least parts of it? >> now, look, this is a company built on jvs. anybody who comes in has got to deal with everybody. this is a very hard company to take over. very hard. and i think that people planning to take over have to understand that it is still levered to
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natural gas. so they must keep selling assets in order to be able to hit the cash flow. >> aubrey retiring april 1st. in the meantime, they're doing a search, and there could be discussions with the board and other parties, maybe it's not a wholesale takeover of the company. maybe it's parts go to various players. >> how is this for irony. morgan, today, rich kinder, best operator. natural gas. rich kinder is making the bet that all money lost. >> that's a big deal. which we should actually talk a bit more about later in the program. or maybe we'll do it on cramer's "mad dash." we just have a few moments to go before the opening bell. carl, of course, has more from r.i.m.'s blackberry 10 event as we count down to the launch. in fact, there he is. carl. >> not long now, david. widely seen as make or break
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starting at $37,800. ♪ time for cramer's "mad dash," ahead of the market open. we want to talk about this deal. you taught me how to say it -- >> like copacabana. >> almost a $5 billion deal when you add everything in, just to give everybody a .4563 unit.
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huge lbo. and 23.5% premium. >> longtime joint venture partner with rich kinder. the key thing is, eagle bird has changed america. it's like saudi arabia. and you've got to get the stuff out. both natural gas, particularly natural gas liquids, which are used for plastic, and oil. their pipeline is the way to get the natural gas liquids out. so kinder wanted to take all of it, rich kinder is the most forward thinker in america. this means there will be lots of refineries built in louisiana, and in texas. >> that really has that kind of significance? >> it's gigantic. >> really? >> yes. >> so when they say pursuing development, this will be able to do it. >> yes. >> and gain entry into north texas and mississippi. >> rich kinder thinks it's
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happening. remember dow chemical? rich kinder thinks this is the beginning of the revolution. he wants all parts of anything that takes oil and gas out of eagleford. i want to go to eagleford and do my show from it. mark tapper is retiring, he said this is it. this is the area where we have so much untapped, and we've got to get it to market. only kinder wants that pipe. >> so interesting. so many things we don't talk enough about. >> no, no. >> changing the face of energy and production. >> and coppano was on the show saying, we know what we're doing. you know what? they make fortunes for their shareholders. great jop copano. >> we're going to see dow 14,000 for the first time in more than over five. the opening bell just minutes
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you're watching cnbc's "squawk on the street." we're at the financial capital of the world. the bell about to ring in a minute 30 or so. we're watching down 14,000, just points away. at the same time, with the release of the contraction in gdp. a lot of interesting reactions in the currency markets as well as the gold markets. gold higher by about a percent. the u.s. dollar has weakened both the euro and the yen. the euro is above 135. >> how much of what happened is directly related to congressional policies. a lot of people thinking we may not resolve this fiscal cliff until this week. how much was just a fewer -- i can't do a thing until washington resolves this. >> you talked about it endlessly. >> yeah, endlessly. >> we didn't see it in consumer
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spending. >> big inventory contraction. i think a lot of this was, i can't handle anything until i know -- it's sandy and washington. washington played a major role. i think the republicans and democrats finally realized they were killing this economy and they've gotten together, and now we're seeing things go up. [ bell ringing ] >> a law firm marking its pro bono project in human trafficking in america. all right. a lot of interesting movements here. we're seeing shares of research in motion higher by about 2.3%. in the past two days, sold off. a little bit of selling prior to the event. >> incredible how clever the market is.
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now people say, i've got to sell it ahead. because dumb people got in really ahead. >> they weren't so dumb. they had incredible -- you know, i think we tend to overexaggerate how things are at the bottom and overexaggerate how good things are at the top. that seems to be the story of the market in terms of some individual issues, in terms of r.i.m. and best buy. why it's up so much after the last quarter is unclear to me. certain people make arguments about the cash flow numbers. look at that. it's up there. either a r.i.m. or best buy. >> the ravens are playing this weekend. you know why they call them the ravens. edgar allen poe. you know the best stock to bay today might be? cbo refinery. they just rang the bell. an amazing number.
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up $1.87. bolero, up because of all the oil in the eagleford. the place to be. right in front of us. the house of usher. >> amazon shares, not quite at a fresh record high, but they are good for a 7.5% gain on the back of earnings that showed improvement of both gross margins and operating margins. that's really what people are hanging their hats on this morning. >> how funny. >> yeah, i mean -- >> the ironies here are so -- i mean, i feel bad for apple. >> really? >> well -- >> your heart hurts? i mean, what is that feeling? >> you can hear it. it's in my throat. >> you're choked up. >> i'm choking for apple. here's what is so amazing about amazon. when they put out how they're really doing, they talk about this in terms of the number of guitar picks we sold is equal to the number of people who went to woodstock.
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santa hats we sold could outfit santa for a hundred years. but how about some real numbers? the paper wipe, they didn't have enough. if they didn't have enough, we'd say what fools these mortals be. amazon is clearly inward. >> are you saying that amazon is immortal in terms of the stock going higher, or -- i mean, because i sort of feel it both ways from you. like the stock is going higher, so you have to respect that, at the same time you're mocking the fact they don't answer the questions when it comes to the hard numbers. >> amazon is unanalyzable from the point of view of the other companies. david, do you remember the days when i would go on and say, yahoo! -- >> and it would go up. >> i would say, yahoo! boom, up six. there's only two stocks that have that visceral reaction from
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the public. amazon and netflix. two companies that people use and love, and therefore, buy. >> netflix up again today. >> up 24%, yeah. >> up this week at least a little, back and forth. backed off a tiny bit. again, back to the point at the bottom, everybody was talking about potential bankruptcy. boy, that turned fast, didn't it. >> amazon, we thought would go back at a certain time. >> there was -- there were thoughts they were spending so much. >> you're absolutely right, i'm completely conflicted on amazon. i see the stock go higher. i want to tell everyone to buy amazon. but i have to have some numbers. other than a switch in gross margins by a smidgen. does that make me too constrained? >> i don't know. you also know from your personal experience, and those of others, you understand it's a behemoth,
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the way it's taken transactions to such a simple level of pushing a button. by the way, having it be at your door potentially the same day. there are powerful things at work here, not to mention the other businesses where the margins are better, like the kindle, where there are no margins there, but they're investing. >> everybody wants to use their warehouses. remember when people say, once there's a sales tax, they're history. it didn't matter. >> california, i guess we were wrong, yeah. ease of use. >> it said the 3-d players weren't that strong, tvs weren't that strong. maybe they're buying them at best buy. >> big pause. >> maybe. listen, best buy has been an interesting move up here. by the way, period is going to begin very soon. richard schulze has his opportunity to do due diligence. now, i think the dell --
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potential dell ibo got people excited about maybe they could get the equity. i hear it's going to be a very, very, very -- is that three verys? they'll come up with the money they need, even with him rolling in his stake. this may be the fourth quarter numbers, people perceive as being better than anticipated. >> if they're giving money away to netflix, can't they give money away to michael dell? isn't there just this weird supply of money out there? >> there's a lot of money, but it's still seeking a return. >> sometimes. >> yeah, sometimes. >> let's check in with bob who's here on the floor with more on what is moving this morning. hey, bob. >> everybody has just been bending over backwards to figure out the right way to figure out this dismal q-4. the inventory levels, i don't want to get into that granular ti. i would know the durable goods
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number was strong on monday. if we get a strong farm payroll report on friday, maybe close to 200,000, i think that will go a long way toward mitigating the damage from this q-4 report. and if you're a cynic, of course, i've got a lot of cynical comments this morning, the fed is unlikely to make noises about imminently ending its stimulus program today, partly because of the q-4 report. keep an eye on the earning situation. very carefully, day by day, look at the numbers, they keep going up. 40% of the s&p 500 is now reporting. enks growth, 5.2%. that's according to the s&p capital iq. last quarter, only 3%. revenue growth, 4%. last quarter, revenue growth zero. i am not claiming these are spectacular numbers. they are, eh. but there is very clear evidence now that the main thesis of the bulls was right, which is that q-3 and q-2 was the earnings
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trough. the evidence so far supports that thesis. speaking of the bulls, you've got to give them credit. so far they have been right. three weeks ago, i said the big trade that the bulls are pushing for 2013, and they did this a month ago, go short treasuries, go long cyclicals, go long copper. so far, they have been right. they've certainly been right on shorting treasuries, they've been right on shorting cyclical stocks. they've been on the flattish side for the quarter. nickel up 3%. i don't want to say it's the start of a trend, but this is another little piece of that big trade for 2013 that the bulls were pushing a few weeks ago. that looks like it's happening. the nikkei, speaking of that dollar/yen trade here, 33-month high. we see hong kong 21-month high today here. i've been pushing housing and talking a lot about it.
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all the builders are coming out now, new orders up 51%, if you exclude a merger that they made. all these new home order trends have been enormous here. horton up 39%. these are new orders. 20% was spectacular last year. now we're getting numbers in the 30%. and in the case around the 52%. these are all great numbers. so let's talk about building trends for just a second. reilly made an interesting point here. they said construction costs were coming down. i don't know anybody else who has made a comment like that. i tried to listen in on their conference call, in two hours or so. that's a very important comment if it's really accurate. other trends i'm hearing about, not from ryeland, prices for lots are going up again. holy cow, remember four years ago, you couldn't give these lots away. now the prices are going up. finally, jim, i'm continuing to hear about a shortage of skilled labor in the construction industry in certain parts of the
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country, because so many people left the business. now that business is improving, they still can't get the people they need in parts of the country. going to hear more on that. i'll tell you if we can get more information out of ryeland on their conference call. >> what a strange time. we need more people to work in oil and gas and we need more people to work in housing. we just don't have the right skill-sets. is you study the gdp report, rick santelli is at in chicago. >> a lot of u-turns going on. obviously there's a bit of a disconnect between what's going on in the equity complex and what's going on with one measure of the economy at least in the form of gdp. it's showing up in the fixed-income markets and currency markets as well. we'll get an interday of 5s. negative gdp, fourth quarter, it moved down to 86 basis points. look at it now, it's at 90. look at a 10-year, around a 197.
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it's back up to 201. look at the 30-year, it moved down around 316. it's now at 319. the point of the story is, if there's a market momentum going on, mostly predicated on stocks, yesterday was a historic number of puts in the treasury complex. so this morning everybody's running around after the number going, wow, what a contrarian indicator it was. but don't look for the notion of selling treasuries or buying equities to go away just because of the gdp number. on currencies, it's even more convoluted. look at the interday of the dollar index. jim's pointed out, you think this is going to make the fed say, oh, well, we can stop our programs? this will probably make dissension about the weakness of the economy grow a little less aggressive. it doesn't mean their medicine's right, it just means their interpretation that the economy is still weak. maybe it's their fault. we'll get into that on the santelli exchange. but the dollar index was already
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down because the euro had already rallied before the data came out. the fact that it didn't rally after the data was out gives notion to the conviction of many fx traders if the economy's going to be weak, consider the fed that's always a dollar index buster. back to you. >> you're good. the passion, i love it. sharon epperson at the nymex. >> jim, what is bad news for the economy is good news for gold. gold prices jumped more than $10 after that disappointing fourth quarter gdp report. a lot of traders focusing on the fact that maybe the fed will keep rates low. maybe this means that we will perhaps hear more from the fed in coming days, if not today. we're also watching, of course, what is happening in terms of oil prices. and we are looking at oil prices that hit new best marks of their own with the wti topping $98 a barrel. first time that's happened since september. brent crude topped 115 for the first time since october. we pulled back off of those
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levels. traders will be watching those levels carefully as we get the inventory report coming out from the energy department at 10:38 eastern time. i'll bring that to you live. look at the nat gas snapping back a little bit after declining in the last six days, about 10%. so getting a little bit of a pop here in natural gas prices. melissa, back to you. >> thank you very much, sharon epperson. we do note we have the white house's response to the disappointing fourth quarter gdp number. the drop in federal defense spending is likely due to the fears of the automatic spending cuts that have been looming in the fourth quarter as congress was dealing with the fiscal cliff issues. the white house also saying economic indicators can be volatile. similar to what jim has said, this could be a one off. we'll bring you more commentary as that comes across. carl? >> melissa, thanks. in the meantime, there is irony in the fact that r.i.m.'s blackberry 10 launch is taking place in the city named the big apple. up next, what's at stake for
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r.i.m. as we count down to the big unveiling. as we go to break, look at this morning's early movers. we'll be right back.
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a mock video made squarely at developers, trying to convince them a new device was on the way and a new operating system. four months later we're in new york city, jon fortt and i talking about the launch of the blackberry 10, which will happen in the next 15 minutes. good morning to you.
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>> good morning. >> we've had discussions this morning about how it behoove them to lower expectations. >> yes, the stock, look at it. it's more than doubled just over the past few months. right now, people are expecting devices to come out and change the ecosystem in mobile, google and apple the ones that are really riding high. that's not going to happen. r.i.m. will be selling old devices for quite a while. those buyers are not going to be able to afford these expensive new devices. it will take time to prove they can sell these in north america. when developers see that, maybe more apps will come out. and maybe they'll gain momentum. but it's probably the second half of this year, or even next year's story for this to really make an impact if they do do well. >> apps, 70,000 is the number that's being thrown around. it's nowhere near apple's over half a million, obviously. facebook not making a custom app for this device. is that going to keep someone who's waited this long from
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upgrading? >> it absolutely matters. i think probably what r.i.m. needs to do is take a page from apple's playbook back with the mac 15 years ago. what apple did is say, okay, look, maybe we don't have all the apps that windows does, but what we can do is have this suite where photos will be better, video editing will be better. r.i.m. needs to rebrand itself at this event and say what they're really going to own. is it going tob the enterprise? is that work experience going to be better? they need to do that and have a niche they can protect to maybe take advantage when the market transitions again. like apple was ready after having the mac for mobility for the ipad and ipod. >> the bull case is he comes with this german tech discipline, and he managed cash well enough to get them to this point. so that this product could stage a fight. tell us how that fight will turn out. does he deserve that credit? >> give that guy credit. he came in saying r.i.m. was in
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a turn-around story. and came back and said, oops, yes, it is. here's how we're going to do it. since he came onboard and reset the timetable, the trends have largely run on time. the stock has run up. the question is now whether it's run up too far. so give him credit up to this point. now he's got to be really, really savvy about how he sets expectations going forward. >> a lot of discussion about the carriers. no one likes to do waffling. they would like this to do well. at the same time they're not going to be motivated to pay the kind of service fees they have in the past, or the subsidies. where do they play? >> the way this worked in the past is, traffic from any given blackberry got routed through r.i.m.'s network. the carriers automatically gave an extra payment for services. that was pure margin for r.i.m. the new phones, it will not be the case, so that will hurt them. can thorsten heins get consumers to pay for a service on the back
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end. >> we're hearing the music fire up behind these black curtains, david. >> thanks very much. stay tuned for a live interview with john scully, after the blackberry 10 launch. but first -- >> coming up, this can be one rough and tough market. but we have someone here who will help you stay balanced. jim cramer with 6 stocks in 60 seconds when "squawk on the street" returns.
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time for "six in sixty." six stocks in 60 seconds, give or take a few. mighty ices. >> people didn't think they would approve their super cholesterol drug. they were wrong. >> super cholesterol. buffalo wild wings. >> coming on friday, a lot of
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people are saying tap it. i think it's interest to start a neutral before the super bowl. the wing day. >> maybe people buying in advance. >> some cloud jitters from bm ware. they said this quarter is going to be good. >> b.e. >> be careful, tactical short. >> we don't talk a lot about this company. $36 billion already paid out. >> a lot of people say this is the takeover play when the ceo retires. a great earnings play. eagleford. >> it's going to take over play too? >> could be. >> i think this company could split. it's a food service company. and a crane company. it has to buy, it cannot stand. what was that guy's name? it was like he was a good president. >> daniel day lewis. >> exactly. >> you've done so much on energy. i think we could do so much
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more, whether it's the kinder deal today or the eog, or what's going on in the eagleford, or the barnett, refiners, bolero. >> core lapse tonight do the reservoir mapping to see where oil and gas is. they tell me there's much more oil in this country than anyone believes. hey, they're right. >> there's a lot more oil. and we also have an awful lot of natural gas. >> we have too much. we're flaring it. natural gas liquids, really important, because that's how you make plastic. we will be the cheapest place on earth to make plastic, including kuwait. >> that would be a significant increase in jobs conceivably in manufacturing capacity. >> millions of jobs. >> but we don't have a national plan when it comes down to that, at all. it seems to be the exactly opposite of what it should be. >> because we're not -- we have a government that wants to wean us off fossil fuels. if we used this as a surface fuel, natural gas, it would lower the price of gasoline dramatically. but there are a lot of greens who don't want that.
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keep that in mind. >> all right. i will. we'll be watching you tonight 6:00 and 1 1:001:00. >> thank you. >> take care of that voils. >> thank you. guys, thanks. coming up, the moment investors and gadget lovers have been waiting for. research in motion set to unveil the much anticipated blackberry 10 lineup. will it live up to the hype or disappoint. ving ] ♪ [ male announcer ] every car we build must make adrenaline pump and pulses quicken. ♪ to help you not just to stay alive... but feel alive. the new c class is no exception. it's a mercedes-benz through and through. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services.
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welcome back to the second hour of "squawk on the street." and the moment you have all been waiting for. research in motion's make-or-break moment. carl quintanilla is live outside the blackberry 10 launch. carl? >> yeah, not too long from now, melissa, we've been talking a lot this morning about how long we've waited for this. one audience that blackberry is hoping to court, of course, app developers. one this morning said they are upsized to developing apps for r.i.m. products. we'll see as we await the presentation. we think there's going to be a little humor injected into this, at least at the front end, where i don't know if you remember
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kevin from crackberry, sort of a national hero in canada who has carried the mantle for a long time. word is he is going to get a hair cut onstage. i cannot tell you why. but apparently that's a big deal. when that gets started, we'll bring it to you. in the meantime, a lot of anticipation, and months and months of waiting are about to come to an end, melissa. >> who will give this hair cut to this kevin person? >> that's a good question. that's a good question. thorsten heins, of course, is he. he has a masters in physics. we'll see. we will see. i think we'll be joined this morning by the president and ceo. they've worked with companies like at&t and gm. he joins me here today. alex, good morning to you. >> hi. >> you made the point that for a long time, security has been the advantage. i wonder if that's still true
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today, if it will still be true with this product. >> i think security is an integral part of what blackberry brings to the table. especially when they acquired kunix a few years ago. it's built off of that same technology set. >> r.i.m. app was the first app you helped develop, right? >> it was on blackberry. >> back to '99? >> back to 2009. so a few years ago. >> what's your expectation for this today? >> i think there's a lot of anticipation built around this event. this is a very critical event for r.i.m. to get this right. and they've certainly had a lot of time on their hands to build this operating system up from scratch. which is what they've needed to do all along. wash away the old operating system and technologies they had and start fresh. >> at the same time, other companies haven't exactly been standing still. i wonder how much migration do you think there has been, just in mind share, not just market
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share, but mind share intent to buy, as android and apple have had this runway to themselves for a while. >> and now you also have microsoft in the game. and i think really, microsoft and r.i.m. are going to be duking this out for third place. >> when you say they've got a chance to make this right. what will make it right, what will make it fall short of right. >> they need to activate the existing user base. they still have millions of users on blackberry. they still have a lot of i.t. departments in large enterprises that like r.i.m., and like the security features that they provide to these corporations. so you need to really embolden that core user base and build off of that. >> melissa, you got a question back home? >> carl, to your point about mind share, alex. if i'm an app developer out there, i'm not going to choose to build an app for a research in motion device.
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the problem seems to me that it's sort of a virtuous cycle. you need the app ecosystem in order to attract users, but you need the users to attract the app developers. you need to say, research in motion is a device i am building for. >> it's that typical catch-22. i think that a lot of app developers are going to be looking very closely at today's event to see if a lot of the promises that r.i.m. has been making over the past many months about what this new operating system is going to provide, all of the new features and capabilities of it, will really be held true. if that is the case, then i think that they have a promising start to try and rebuild that app developer community, and start building their own ecosystem from scratch. because all the old applications need to be built around this new operating system of theirs. >> one last point on that. go ahead, guys.
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>> forgive me. it's quite difficult, as you appreciate. i thought there was space there to ask a question. there are 70,000 apps apparently that have been adapted up from other carriers, or from other operating systems. how did blackberry, for this launch, ensure that that happened? does it pay people to ensure that the apps are around? obviously that's one important part of the ecosystem. there are others, but that's an important part. do they pay people? >> i think there was a small stimulus payment of sorts involved in that. but i think that they did a number of events around riling up the developer community. the other thing to keep in mind here is that you can make an app for this new platform with html, that's different than ios and android where you need to be a software engineer. they can appeal to a larger community of developers who know technologies and can build
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applications on this platform. >> you've actually had in your hand some early prototypes of the 10, yes? >> yes. >> your impression has been? >> we've seen over the past number of months building here, i think they're taking a lot of the right steps to get to this point. about what they're to launch today, we don't know what will make it and what won't make it. >> one thing getting some buzz is this notion of not having to go back to a home button, or make the home button seem technologically old. you can navigate between apps without going back to home base. is that going to fly, do you think? >> i think that's going to be really interesting to see how that plays out. i think switching between your personal and business modes in the phone will be interesting to see, as that appeals to that enterprise, that i.t. department, the security department. >> all this discussion in terms of the enterprise, byod, right, bring your own device. by the way, we might mention you
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could hear applause in the background because the presentation is about to begin. will corporations give this a chance? >> i think that they have a small window here to take that chance before a lot of these enterprise i.t. organizations have byod entirely in their organization. at that point, that leverage doesn't really remain much longer. everyone's just bringing their own devices. >> we're joined not only with alex, but rob, president and principal analyst, paid consult tapt ant to rim. good morning to you. >> good to see you. >> what should people know about this? have you held it? have you seen it? >> i've got it in my bag. i just can't show it. >> what's it like? >> well, it's a very elegant device. they improved the keyboard quite a bit. it's conformed in size, very similar to the iphone 5. very sleek. but it has some major advantages to it. for instance, it's got a
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replaceable battery, something that's kind of consistent with rim, long battery life. in fact, they'll show you some of the advancements of the battery in just a little bit. it's kind of like, if you look at the market and saw the problems with how the other phones were having, and developing the phone against those problems, that's allowed them to do this. microsoft did this with the windows phone 7. they looked back and said, here are all the issues up until the windows phone 7 launch. r.i.m. looked at the problems that happened after that and created a device that kind of addresses the new stuff we have with security being one of the biggest components. >> what do you say to people who ask, what's taken so long? >> the reset. the thing was, the previous administration at r.i.m. kind of got lost. and it took a while for them to recognize they were in a world of hurt. they brought in a new ceo. they reset, went outside and got another operating system. even apple got another operating system and brought in lennox for their phones to make it happen.
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very secure to address their phone. because they waited too long. so they needed to go outside. >> simon? >> yeah, i want to ask you, as i understand, you facilitated dialogue in part between blackberry and the others in the universe. the reason blackberry is still around is because people pay this monthly fee to access their systems. $7 to $10 a month for corporate customers, retail customers spending about $2 a month. that goes back to blackberry. obviously an income stream. how sustainable is that in your view? what did the customers say to you? >> well, the reason they do this is because that way they control the information. they've got better feeling of security for the information that is within their control. and they're pretty comfortable with that. blackberry sells in pharma,
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medical, they sell for government, areas where security is incredibly important. they like this idea of being able to control this information and knowing where it is at all times. that's been something that the old blackberry, the old r.i.m. had trouble maintaining. the new r.i.m. seems to get this and is reforming around this idea that they will control this information. at least i.t. will control the information that they have. >> rob and alex, hopefully you'll stick around with us for a few more minutes. we'll try to get rob to pull the 10 out of his bag. we're moments away from the unveiling of the blackberry 10 here in new york city. we'll be right back. ions come oo mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured.
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is connecting today's leading companies to places beyond it. siemens. answers.
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breaking news this morning in new york city. the research in motion unveiling the long-awaited blackberry 10. we're here at south street seapo seaport. rob joins us from the group, analyst of paid consultant to r.i.m. mark, as we await the first look at this, your view is generally people have sort of made up their minds about whether they want to own a blackberry. >> i think there's a subbase of very strong and very loyal apple and android users. for the most part, when people go into the stores, they've already decided which phone they're going to buy. so for r.i.m. it has to be something different, something unique at a different price point that has to wow the
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consumer. >> sell-through levels, what needs to happen this quarter, next quarter. what does that do to margins. how quickly can they ramp up production if the demand is actually there. >> that's a good point. there are several metrics of success, it's not just the number of units they have to sell, it's the margins, asps. i think r.i.m. has learned quite a bit of nokia who priced its products too high. i think we're looking for 500,000 units in the first month and potentially reaching 10 million for the full year. it needs to attract people to buy the product. >> mark, what's the worst-case scenario for the stock? if you look at the stock run since september lows, about $6 a share, if research in motion today comes out with a blackberry 10 device that is somewhat disappointing, how much of that gain do we retrace? >> the stock's going to be on a wild ride, i think, for the next few months. i think if you look at the bracket, i think it's about $12 per share, which is what we calculate tangible for value.
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i think it could get to $19. one of the things we do highlight is we don't see very predictable earnings for this company until maybe two, three years from now. because it's really about reaching out and trying to drive the unit growth, improve margins. and with the two products today, they have to get new products out. and get a larger screen device as well. it's going to be a wild ride for investors. >> mark -- >> guys, you're looking at kevin from -- yes, kevin from crackberry. the phone is interesting. this is really why we're here. >> don't draw blood. woo! let's give him a round of applause. [ applause ] you know, do we have any clippers? we could put the logo of blackberry on the side here. >> no? >> how stoked are you about blackberry. >> they have to build up the momentum with something, right? can you explain the context
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behind why kevin matters to this audience? >> he's kind of the equipment essential fan. they don't have a steve jobs, so what they do is bring out their biggest fan, and have them play that charismatic role. i think that's a good idea. i wish more of the folks -- who is the charismatic guy for android? i don't know. they can point to him and say, here's our guy. >> it does lead to the management. thorsten heins is a german technology physicist. i think speaking of which, they're bringing on the man himself, thorsten heins, the president and ceo of r.i.m. [ cheers and applause ] >> good morning. good day. good afternoon. good night. wherever you celebrate the launch of blackberry 10. thank you for joining us here from new york, to london, dubai, johannesburg, paris, jakarta,
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delhi and toronto. and i guess i hear some noise here right now, if i'm not mistaken. for sure, to all of our employees watching around the world, we have definitely been on a journey of transformation. a journey to not only conform our business and our brand, but one which i truly believe will transform communication into true mobile computing. it's been almost one year exactly since i was handed the reins at research in motion. and it has been easily the most challenging year of my career to date. but it has also been by far the most exhilarating and the most rewarding one. and i remember people asking me how i felt about taking over the role of ceo. and all i kept saying was, it was one of the best
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opportunities i've seen in my career to date. because i know that innovation is at the heart of r.i.m. and that opportunity that i saw was blackberry 10. and now, finally, here we are! [ cheers and applause ] this is so exciting. and so many people have played a role in getting us to this date. our developer community and application partners, our carry-on retail partners, our customers, and the members of the communities where we live and work. but most of all, it has been our employees. the people at r.i.m. have been at their most creative, their most engaged and their most
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committed. i really would like to take this moment to thank our employees, and to congratulate you on your accomplishments. blackberry 10 is here! [ cheers and applause ] this is one of the biggest launches in our industry. and today is actually not the finish line, it's the starting line. when we first gave you a look at our vision for blackberry 10, we told you we were building this with a specific set of customers in mind. it's people who are hyper-connected socially. people who have an appetite for getting things done. the true multitaskers, and people who want to get the most out of their smartphones. it's people who need balance in both their personal and
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professional lives. people who want simplicity of having everything in one place. it's people who want to flow seamlessly from app to app and feature to feature, without having to go in and out using a home button all the time. people who consider true multitasking a must-have. and we all know these people are moving quickly, and they need their mobile devices to keep them up to speed, and help them get things done. and guess what, blackberry 10 will keep them moving. we've seen the industry move from narrow band to broadband, from analog to digital. and now we intend at r.i.m. to lead the move from mobile communications to mobile computing, to true mobile computing. what does that mean. we will soon give you more ways
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to connect your mobile experiences and yourself, not just with other people, but to the whole world around you. you will be in the middle of your personal internet, constantly connected in realtime. and in a more secure network, we will be a leader in connecting you to your internet of things. and this is what being connected will mean in the future. we have created a platform that is aimed to work with other machines to extend you and your information beyond the mobile device to a car, to your home, or health care system. or wherever you are. this is the promise of the blackberry 10 platform. we are in an era today where
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having a good browser, great messaging apps, a good camera, and social networking on your phone is just expected. so with blackberry 10, how do we make sure we go beyond those expectations. first, blackberry 10 builds on and betters more than 20 years of our communications and security leadership. and it adds an interestingly secure, realtime operating system at the core. and blackberry 10 has a focus on content of apps, and it offers a user experience that adapts beyond anything you have seen before. but before i get to unveiling this platform in all its glory, i'm going to ask for a few more minutes of your time. just saying we have reinvented this company is simply not enough. today represents a new day in the history of blackberry. two years ago, we had to make a
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very serious decision, adopt someone else's platform or build a whole new one from ground up for blackberry. and we made the tough call to go it alone. and for that, i must thank -- >> thorsten heins will lead us through some suspense here for the next few minutes. mark and rob joining us to talk about what the phone may be. it strikes me, we haven't had a cultural moment like this since the last, say, apple launch. does that suggest that they are as relevant as they ever were? >> i think each year goes by, you can lose some relevance. i think they've injected energy into their devices. i think it's off to a decent start. >> who should be worried at this point? in terms of competition. >> i think all the competitors need to be paranoid. if you look at a lot of the devices, some of them are looking pretty old. some of the designs haven't
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really changed over the last four, five years. i think where we see a lot of growth is the auto category this year. i think they might have the chance at opportunity to execute. >> rob, he started out by pointing out this launch is happening in jakarta, john h johannesburg, london. this is a global product, not a u.s. product. >> they've got an international president running this company. very different from apple. look at r.i.m. as the only other apple-like company where the product is vertically integrated. they have their own operating system. the big difference is r.i.m. is truly global. they're strong in the u.s., but also overseas. apple is primarily consumer backed business. r.i.m. is primarily business backed consumer. >> one of the co-founders of the company, still on the board, unlike jim balsly.
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heens' contribution is strong enough to let their engineering live to fight another day. >> if you draw the comparison to nokia which destroyed its balance sheet in the process and had to crawl out of it, r.i.m. is in a better position. in the near term they'll be boirng some cash. it's how quickly they can get the products out. >> simon, got a question? >> yeah, thank you. mark, today's "usa today" asks is r.i.m. in for a kodak moment. what they mean by that, is this a turn-around story like ibm, cisco, and apple? are you suggesting from your earlier comments that there is such a loyal base, that that is an unfair question? or could this be r.i.m.'s kodak moment? >> that's a good point. there is a loyal base, but that base is eroding. a lot of the customers have actually moved on to android and
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apple. so it's really stemming that die-hard blackberry fan. which happens to be the older demographic. for true success they need to go out for someone younger. if ever there was a brand that's lost its cool, it's blackberry. >> and apple when steve jobs came back. >> thorsten heins just made some news. the name of the company will now be blackberry. >> big news, yes. >> research in motion is no longer the name of the company. it looks like a new ticker symbol. rob, you're clearly in on this. >> realize what apple did when it rebranded itself to apple. we're now out of it. blackberry is saying, we're going to live this and be this product, this product focus company, much like apple. you'll see a lot of stuff apple-esque as they go through the presentation. >> new ticker on the nasdaq will be bbry. how long has this been in the
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works, rob? >> i just found out about it last night myself. >> what does it say about their focus, mark? >> i think it's a company open to trying new things. they really have to shed the old image and move on into the future. i think this is a defining moment for them. it's a start. i don't think it's going to be a binary event, as long as they launch new products and keep going from there. >> not to speak ill of them, one of the comments about the management is they were cocky, wanted to get into sports team management ownership, and that they did lose their focus and did not truly understand the way apps would develop over time. >> yes. we see that a lot in technology companies. a period of arrogance, that permeates, and a period of denial, and a period they really have to struggle. very few companies turn it around. i think you need to have some resources, cash on the balance sheet, really differentiate a product. and it has to be something different in terms of the average selling price.
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>> simon? >> yeah, rob, can you give us a glimpse as to what is happening internally with blackberry? externally, a new ticker symbol, new name of the company. internally, the truth is, he's brought in these kind of trendy suites to come and deal with the interface. there's talk that the organization -- or let me ask you the question, is the organization melding as one? do they line up single file behind thorsten as he speaks there? >> they seem to. the fact of the matter is, remember, steve jobs made major cuts when he took over apple. got rid of the extraneous products. really what you're seeing here is the company's trying to wrap its head around very successful strategy that steve jobs actually executed at apple, and trying to do the same thing behind a german executive who actually has stronger financial skills. very interesting play. >> we're about to see the unveil here. there is the blackberry 10. [ cheers and applause ]
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>> ladies and gentlemen, we proudly present the blackberry z-10 and the blackberry q-10. [ cheers and applause ] the new blackberry z-10 and q-10 powered by the platform blackberry 10. aren't they beautiful? [ cheers and applause ] we knew that a large display was important. because this is the window into the blackberry 10 experience. and we made sure by using the latest technology, the blackberry 10's screen images are clear, sharp and incredibly vivid. actually, what we did is, we created a cinematic experience
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with this suite. the back of the device offers a textured surface that makes it really comfortable to hold. and the back cover curves ever so slightly around the edge that it just feels good holding it in your hand. and the browser is incredibly fast, intuitive, responsive and elegant. and whatever you do, you're only one swipe away from the heart of all of your activities. now, i've been using blackberry 10 faith philly, and i'm amazed by how responsive it can be and how quickly i can share information. this device aggregates information for me intuitively, and adapts to me and makes me even more efficient. i've also been testing the blackberry q-10. this is the first blackberry 10 smartphone with a physical keyboard.
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[ applause ] and we know there are a lot of physical keyboard lovers out there, right? we heard you loud and clear. there it is. we built the same fantastic blackberry 10 user experience, but with a physical usable keyboard. and we built this for all those people who told us we just have to have a physical keyboard typing experience. and you're going to love this. no matter what keyboard you prefer, these blackberry 10 devices are simply the absolute best typing experience in the industry. period. meticulous attention has again been paid to every little detail of the q-102. look at the glass cover. this material was designed
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exclusively for this product. you won't find it on any other mobile device. and it's thinner, lighter, and stronger than plastic. and it looks beautiful. so these are the devices, and i think it's time now for us to see them in action. please join me in welcome iing partner onstage. >> how are we doing. >> we have been on quite some journey. >> yes. >> when we did all this, what did you learn about what's the most exciting part of blackberry 10? >> that's easy. for me it's got to be the blackberry help. i've got e-mail, i've got facebook, i've got twitter. >> and with that, i was told the keyboard was invented in 1850. obvioustil good enough for someone. as the q-10 will feature a
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physical keyboard. jesse hicks, the editor, author of research no motion, how the blackberry's ceos lost an empire. jesse, good morning to you. >> good morning. good to be here. >> sort of sets you up as a natural skeptic. to what degree are you impressed or not impressed this morning? >> well, so i think what we see here is blackberry both trying to appeal to old fans and maybe win over some new ones. so one strength the blackberry has always had is the physical keyboard. but we also kind of live in a touch screen age right now. so i think they're trying to have it both ways here. and we'll see how that plays out. >> yeah. rob, smart -- i mean, is it better to commit or try to spread the love around? >> what we learned from apple is, don't lose track of your fans. your fans like the keyboard, don't throw them underneath the bus. they're being real smart. your fan base will carry you through. that's your loyalty group.
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and you can't ignore the people who are coming that don't want the keyboard either, so you have to expand. if they jump too soon, their fans goes to whoever else has a keyboard. >> the first question is, supply chain, simplicity, right? it gets automatically a lot more difficult. >> if you look at the market right now, samsung is really the company challenging apple. th they try to hit your personal sweet spot. that's been hurting apple. one side in the market doesn't fit all except for apple. their stock has been trading positive for a while now. i think this is smarter. >> you mentioned the shares, mark. i want to bring it back to an investing standpoint. setting aside the run-up over the past few months, is this like buying apple at 12 or not? >> i think it's going to be a very wild and hairy ride for the stock. so i think our view is fundamentally for an investor, you want to wait until it settles down to build a
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position. if you look at valuation in terms of what the company can earn, i think it can get to about $19. but i think that will be the ceiling. i think it bounces around for some time. >> heins talking about this is the starting line, not the finish line. they will be up against the serious marketing dollars of nokia and apple and microsoft. how do you husband cash. >> i think it's really to push and advertise the product. it can't just come from r.i.m., it has to come from the carriers. verizon stepped forward with millions of dollars of advertising to really see it through. motorola sold 14 million units. for r.i.m. to see a level of success -- excuse me, blackberry -- >> sure. >> the carriers have to put in a lot of money in advertising and subsidies. >> melissa? >> you're noting, carl, the stock going into the announcement, research in motion shares were as high as a gain of
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4% on the session. 1662 was the high. a little bit of sell on the news here with the stock only up right now close to the flat line. we have seen the stock sell off in the last couple of days, of course, after more than doubling over the past three months. but again, a sell on the news mentality. mark, i want to ask a question to you. you said the upside is $19 a share. what is the threshold we need to reach in order to hit the $19? >> there's a couple of moving parts. in terms of units, i think most people have factored in, and the sell-through will be important in the first few months, but for the year i think it will be 10 million units. we've also factored in lower end devices near the end of the year that will help as well. it's also the asps. if you stimulate something low enough, people will buy it. look at the lumina from nokia? they cut it in half and it started to do really well. and who actually pays for that, it is just coming out of r.i.m.'s pocket or the carriers who want a third or fourth
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option, actually step in. >> mark, thanks for coming by. appreciate your time as always. rob and jesse will stick around if they can. you can see a little selling on that news. got to change our board, too, it's now blackberry, not r.i.m. we're back with the blackberry 10 launch in just a moment.
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if you're just joining us this morning, the blackberry 10 just got launched this morning in new york city.
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a little bit of a sell-off. it's easy to point out stocks doubled in the past few months. not too surprising to see those who have enjoyed a nice run, maybe take some off the table. by the way, melissa, you already know about 30%, not quite as high as it was in december, but still a lot of people think the name is going lower, not higher. >> the move here, carl, is on extremely heavy volume. already to this moment in time, 60 million shares have changed hands. that is the total average daily volume in the last 30 days. lower here in research in motion. to be fair, we've seen this sort of sell-off on an unveil of a new product for many, many companies. we see it with apple, and any of the iphone launches. we've also seen it with microsoft and windows 8. >> you know, i thought carl made an important point, and that's about the pricing. that really is one of the things we need to know moving forward. they've obviously got to ship
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it, ship it in volume. it was fascinating to see the verizon cfo specifically supporting blackberry the other day. and whether they can get back the corporate customers which used to make up over 75% of their customer base, but after, of course, the success call of the iphone now much closer to maybe 20%. so pricing, absolutely key moving forward. of course, to the extent a window of opportunity now as it hits the market. they have to really, really sell in order to take the company forward. let's take a quick break. we'll continue our live coverage of r.i.m.'s blackberry 10 launch, or the blackberry 10 launch by blackberry. john sculley will join us with his reaction to the big unveil. [ male announcer ] you are a business pro.
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let's see what's happening to the share produce. definitely down from the mood there. down 6.5%.
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10% move from top to bottom. bid up in anticipation of what the blackberry 10 might be. we'll come back to research in motion, or blackberry as it's been renamed, in a moment. >> steve, we're also looking ahead to what the fed may say in the latest policy statement later this afternoon. >> melissa, thanks. what if i told you consumer spending in the fourth quarter of 2012 was the best it's been in more than a year. what if i told you that only three times since 2000 have businesses increased their spending on equipment and software more than they did in the fourth quarter. does this sound like an economy that should have a negative gdp number or on the verge of recession? if it doesn't, it's because it shouldn't. i want to show how we got to the 0.1 decline in gdp. all of these numbers add up to, you will find, 0.14 if you're doing math at home. business investment contributing
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1.2%. inventory subtracted 1.3. trade subtracted .25. government, massive decline, 1.3 percentage points. economist joe writing really for a lot of people out there, the collapse in government spending and cautious inventory controls hide the simple fact that households and spending, businesses are investing in the housing market, and the housing market is expanding. none of this agus the economy is in terrific shape, just shape. the big challenge, can the private sector offset what is certainly coming to declines in government spending. will businesses boost inventories in the first quarter to offset the drag in the fourth quarter. will consumers be hurt by payroll tax hikes that are taking effect right now. here's the best way to think about it, and not get too excited. it is still a tepid 2% economy. you get there very easily. simply by, you average together the third quarter of 2012 with
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the minus 05. you get there by averaging them. what you get essentially is a 2% economy. with the weaker number in the fourth. what's clear is this report could be thought of as the ghost of christmas future. if you cut back on government spending, it's mathematically subtracted from the economy. whether it sets the stage by reducing government growth for better growth in the future. simon? >> thank you very much, steve liesman there with the latest on the shocking gdp number. for all the focus on blackberry, we've got to bring it back to the markets here. are we going to hit 14,000 on the dow. that could happen during today's session. jerry is the president and chief investment officer of castle mark management. good morning to you. >> good morning. >> is it not a shocking state of events that you find that the u.s. economy stopped growing in the fourth quarter, and yet the stock market could hit a record today? >> i think it's just par for the
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course. the reality is, as steve pointed out, the economy is not contracting at all. the inventory numbers flip all over the place. think about this going forward. other than the drag from government, there's probably the biggest opportunity in the last six years to see the u.s. economy hit on all four cylinders. and if you expand that to implications in asia, in europe, you have the possibility, in my case the likelihood of one of the biggest expansions in world economic activity since '05, '06. so this is exciting. >> jerry, i'm sorry, forgive me. so you're saying, this is a very exciting situation, because the u.s. economy didn't grow at all in the fourth quarter, therefore, we can go all guns blazing moving forward? that seems extraordinary. an extraordinary comparison to make. >> right. remember this, simon, stock investors are buying companies based on their ability to earn anywhere from a year to three years out.
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our focus isn't on how many inventories were liquidated in the fourth quarter. our focus, and the focus on the stock market getting through 1400, 1500, 1600, is all about what's going to happen over the next six to nine months in the world economy, and that's a positive. those numbers in steve's report show that. >> jerry, i've done this for 20 years. isn't the truth that the stock market is rising because these bad figures ensure that the feds will maintain constant easing. there will be no tightening of policy from the most important central bank in the world, and that's the issue here. >> oh, absolutely. we don't need the fed, but, you know, they showed up with a big punch bowl. and they're still ladling the stuff out. we still have wonderful liquidity provided by not only the u.s. central bank, but the chinese, the european, japanese, all these central banks now are making sure our economies stay well bathed in liquidity. and that's the kind of
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underlying fundamentals that usually drive markets 20%, 30% in moves. so don't be surprised if that happens. >> okay. it is a fascinating situation. jerry, thank you for sharing it with us. one more check on shares of research in motion. soon to be renamed blackberry with a new ticker symbol. we're off the session lows here, but keep in mind this move is o volume. in fact, we're above at this point in the trading session. an hour plus in, by about 20%. still ahead, mcclendon has announced he's retiring and the stocks soar. find out what that means for check ches a peek in the long run. that's next. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture.
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welcome back. i'm kate kelly with breaking news on chesapeake energy. mcclendon who announced his retirement yesterday is well under way. the board of the company is looking both at external and internal candidates and it's possible they'll have a successor before his scheduled retirement date of april 1st. aisle also have some details on his likely compensation as he lives the company and i'm told
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it will likely be a termination without cause. he's entitled to roughly $45 million in total compensation. breaking that down, that's about a million dollar base salary for four years, it's also a $1.95 million bonus for that four years. it's about 1.5 million shares of stock which will vest immediately upon his termination. estimated that figure may change depending on the market conditions. and then fractional jet use and other perks that come to roughly $2 million that come to the life of this contract. you get to about $4 million. that's a pretty handy sum for leaving because of what was taermed an aubrey discount in the stock, the investors were no longer happy with his leadership. at the same time this is compensation he earned and amassed during his tenure in the company. still a big headline figure, but i guess perhaps not as much as
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he could have mad had he stayed on. he was getting very attractive bonuses and stock awards for a number of years. >> thank you. still to come, more on the blackberry unveiling including man who got his hair cut at the event. the founder and it tore in chief of we'll ask him about that hair cut and how he feels it was done and how he likes his new look. stay tuned.
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welcome back to "squawk on the street." now thaz a new blackberriy 10 haas been unveiled, i want to bring someone back for his thought. he's worked with companies. alex, i was asking you off camera if this was the kind of product having seen it now that you would start developing apps for. you say it's too early to tell. >> i think it's too early to tell. i think a lot of our clients are going to be watching this closely. we're going to be talking a lot about what we've seen here, how the software is performing and
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we'll have to see how that fits into the overarching strategies. a lot of the 2013 planning has already begun and we're in the midst of those execution plans already. >> overall impressions, wow factor? >> i think overall they checked off a lot of the boxes that they need to have. there are some new features in there which are exciting. i think it's going come down to whether or not the speed is really there and getting our hands on it, playing with it and see if it performs as well as it does in a demo. >> right. and we'll see how the marketing starts on sunday with the super bowl 5d. alex thanks for your time. we really appreciate it. let's find out what's coming up on "fast money." >> we've got the analyst who calls it right. jim sue ba of city who said to sell ahead of the news. also after-hours action in facebook and qualcomm. big show tonight, guys.
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meantime let's get right to it. here's what you might have missed if you're just tuning in. welcome to hour three of "squawk on the street." here's what's happening so far. >> first you played with this thing. >> i have. >> good, bad, where are you? >> it's a great update for existing blackberry users that love blackberry. >> that's not a ringing endorsement. >> i think pitted against the outside circle, i think it's a little more complicated. >> i think these devices will cause a lot of the officers of companies to say, all right, let's take a hard look before we switch -- the rest of us switch to apple. >> market share for these guys, 5%. two years ago, 20%. i mean a lot has gone on while they have been trying to get this thing ready, and the question is how much has android and ios taken out of the room. >> what's taken so long? >> well, the reset. i mean the thing was is the previous administration at
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r.i.m. kind of got lost and it took a while to recognize they were in a world of hurt. >> kevin from crackberry, this is a big deal, guys. the phone is sort of interesting, but this is really why we're here. >> don't draw blood. whoo! >> there is the blackberry 10. >> ladies and gentlemen, we proudly present the blackberry zet 10 and the blackberry q-10. good morning. we are live in new york city. the launch of the blackberry 10. we want to get you a check on the markets as we see the presentation which is still going on. research in motion trading sharply lower after release of the 10. the stock had been higher before the device was revealed but quickly declined. big sell on the news after that
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unveiling, as you can see, about 5%. all three indices in the lead today after getting close to that 14,000 level. the dow,ed in dak, and s&p. our own jon fortt has been inside the blackberry event all morning long. he's gotten his hands on the new phone, the new software, and here to give us a first look at the device. jon, what do you think? >> they did pretty good work with the software. the phone -- here it is. it's a pretty nice deviation. it feels in a way similar to the iphone 5 and some android phones, a little bit thicker, wider, light weight, so that's good. i think they could have done a little bit better on presentation. they have the trains running on time. not known for the most dynamic personality, but, look. i think what they've done here is they've done a lot that has interesting figures particularly for your business user, road warriors. developers are ready to give
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this a chance so now they have to deliver through the rest of the year. they have to deliver this thing rng show they have enough sales to really entice developers to bathe. they say amazon with the kindle app, mike row soft with skype, they're willing to help develop this. they're willing to see what else. evernote is built in. a good lod for it, carl. >> you make the point they're still look for clarity on pricing and launch dates in the states. there have been talks of late february/early march launch and then you have all these people who might say, yeah, it looks pretty good, my contract goes for another six months. so when will we be able to judge how well this is selling? >> i think right at the launch you'll get a good sense. there are a lot of blackberry folk two years ago who are coming off contract. when you get a sense of those reupping it to blackberry ten or android or iphone, that will be good. once you see the pace of
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developer attachment to this new os, if you see the developer, first tier, second tier developers, game developers, that will start to show some momentum, but really it's not until q4 that you see big uptake and people grabbing new cell phones, q3, q4. if they can deliver these in volume, manufacturing logistics important there. if we see a big uptick at the end of the year, that will be key. not a lot of people buying smartphones in the beginning of the year. let's bring in "new york times" tech columnist david pogue. good morning to you. >> good morning. >> give me your verdict. >> i've had the delightful opportunity of living this thing -- with this thing for a week, and you know what? if it existing in a vacuum,
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people would be worshipping this thing. the sharper screen, retina screen. here's something the iphone can't do. change the battery, add a memory card when you run out of space. really nicely done. so both the hardware and software are really, really buv. they've put their thought into it. >> huh. walk me through degrees of innovation, david. in six months, in a year, what will we look back and say that's what blackberry brought to the table, that's the kind of thing that liveded on, game changeover. anything? >> yeah. they really thought through this thing. it's how much can you do with one hand. they did a lot more with swiping and gesture. the big thing is you can swipe in from one side and see your entire -- all your inboxes. so i'm, twitter, facebook, text messages, voice messages all in one place. very handy. you don't have to go hunting for an app. you tap the one and there you go. i love the little light up here that blinks subtly if one of those messages has come in if
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it's sitting on your desk. that's really good, getting away with icons on black surface. the text entry is really amazing. as you type a word, it guesses what the next word -- what the whole word might be. yes, android does this, it puts words above the keyboard but this puts the proposed words on the letter key. i have to go to the store, and i -- in my texts, i typed an 80-letter sentence. i only had to type about 20 of those characters. the blackberry filled in the rest. >> david, interested on your take. who is the core customer, the target customer for this thing? who could really fuel blackberry into having a good launch? is it the knowledge worker? who is this good enough for? >> well, the problem is, as everybody has been saying, this horse is really, really late to the race, right? the brilliant thing they did was
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they made an apps store that's fully ready to go. 70,000 apps today ready to go partly because they created a little conversion program for android apps. that was really, really smart. so that's ready to go. there's a music store, a movie store. so that indicates the audience is regular people and yet there's this blackberry balance feature that lets a company put their apps and wallpaper in a segregated sandbox, and you can't see that stuff without the password. so in other words you can have your personal stuff and your corporate stuff side by side. when you leave the company, the company can delete the corporate stuff with one keystroke leaving you with your personal stuff. so it's also -- >> i think that's a killer feature. >> yeah. so that's obviously intended for the enterprise. >> and the idea is if you leave the company, the company can wipe the corporate side of the device while you've still got the personal side. i.t. folks will love that. the question is are i.t. folks the ones buying smartphones
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anymore? >> david, for a long time, the brand at large, the company at large faced sort of an existential question, will they be around for a year or two. do you think that changes the calcul calculus? >> yes, i do. thank god you said one year, not five. i'm confident the company will be here in one year. earlier this morning i wouldn't have said so. >> interesting. and it sounds like, guys, and i'll point this to you, jon, they're still aimed at their sort of, not to put a stereo type on it, but a type "a" business-oriented sort of beltway user, right? someone who values productivity over whether or not they can play angry birds. >> carl, that's the problem with this launch is they're still trying to have it all. they're trying to say, hey, this is the greatest device for everyone. we've got this, we've got that, oh, by the way, we've got some good features for corporate users. i doubt they can have it all. so i think one of the marketing challenges over the next coming months is going narrow that and
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say who's really going to narrow the uptaken to device. >> david, aisle give you the find word on that. what do you think? >> i'm not sure. i think it's a fantastic phone, fask software, they've dut dunne the right thing. i don't if they're too late. the difference this time is the 70,000 apps and the 80 million existing users. that's why i think this has a fighting chance where windows phone has a much bigger battle. >> david pogue with "the new york times." david, thanks. as always, great seeing you. you can tell at the bottom of the screen, the z10 available from u.s. carriers at $199 with a contract. $1.99, that's the true low end. john scully will give us his tachlkt first rick santelli is
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asking if s the fed at fault for today's miserable gdp number. rick, good morning. >> good morning. i'll tell you this. as evident by the gdp numbers, the economy took a bit of a hair cut but we'll be talking bausch bers of fedville. a little off the top, please. >> okay. >> all coming up in about ten minutes. be there.
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we were told there would be
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a special guest here at the blackberry 10 launch this morning and there she is, singer/composer alicia keys. we'll have to see to what degree she is involved in the marketing of this new device. we are live. before we get back to the coverage here take a look at the tech sether today trading slightly higher and up. one member of the tech sether seeing very big gains and with that i want to get to bertha coombs with the flash desk. bertha? >> yes, near their historic highs just after the opening this morning. over 284 shares there. shares have come well off that level. still analyst investors seem to reach for the "silver linings playbook" on this one. they're reporting better than expected margins despite earnings and guidants. the firms are actually lowering their estimates on amazon while
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raising their price targets. that like the stock. >> i always love that move, yes. thanks so much, bertha coombs. some are calling today's blackberry event a make-or-break event. joining us exclusively on cnbc is the former ceo of apple, john sculley. john, good morning to you. >> hi, carl, how are you? >> i'm good. i imagine you've been watching this launch with interest as we all have. does it ring any bells? is it familiar at all in the context of an apple story? >> well, i think it has the potential of a really exciting turnaround story. it all depends what the roadmap is ahead. for example, david pogue did great job of pointing out the features of the new blackberry 10. from what i can tell reading about it, looking at videos, it looks very well thought out. i think it has the possibility of being an excellent product for the enterprise market. the real opportunity, though, is
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can they change the company enough to be able to turn it into a sustainable business, and that's really what i've been thinking about. >> what needs to happen to make that second part happen? tore extend hines says today is the starting line, not the finish line. what are the directives right now? >> first of all, merging markets. most of their base are out in the emerging markets, indonesia, south asia. they need to build on that. they've lost so much market share in the u.s., i wouldn't have put a lot of priority on the u.s. second after all, i think they need to think about giving away -- i underscore giving away for free the new blackberry 10 software to these large smartphone manufacturers in asia like zed te, wowway and lyenovo.
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and third they ought to become an enterprise softwares by and reinvent blackberry as a software that's for secured applications that are managed well. they would have a real differentiation versus everybody else including microsoft. >> you know, john, you mention emerged markets. that's where everybody is, hoping was apple's big next move. awe're awaiting a china mobile deal or many acceptance of the brand overseas, is this a chance for blackberry to cut in line, so to speak? >> it could be. a lot of it's going to be about pricing. there are no carrier sudsidies in asia as we're accustomed to here in the united states and consequently the prices are much high for these products in a market where you have an emerging middle class that has much less money to spend. you're charging typically for an iphone $800 for a consumer who makes $1,200 a month. i think real opportunity for
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r.i.m. is to rethink pricing, be able to price very aggressively. one way to do that is to give their operating system away for free to these big asian manufacturers who can afford to sell these products at a low price and then r.i.m. can make its money as an enterprise software company. >> you know, john, one thing people say is although the term crackberry does exist, people were devoted to this product and to a large degree they still are, but they didn't have that personality that jobs brought to apple. do they necessarily need that and if so, where do they find. >> torsten hines would agree he's not that kind of executive. >> steve jobs was a charismatic figure. apple built it around their story. for blackberry, the future is all about enterprise.
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byod, bring your own device is just the begin of what's going to happen in the enterprise market. i think that's what microsoft made a mistake on with their windows 8. blackberry ought to focus on the business user. >> those are two really good points about emerging markets and now that. john, if you've got $2 billion in cash and you fought hard to keep that much in the bank, when it comes to marketing this new product, do you let the dice roll? do you let it ride here, door you really let this make a slow burn and try to make it more of a transitional product to get do you the next step? >> well, the way i think about it is when you're growing a low margin hardware business for handsets, it takes a lot of working capital and it takes the scale of a large well managed supply chain. that's clearly the advantage of other companies, not blackberry.
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so i wouldn't be wasting that $2 billion on supply chain investment into hand sets. i'd be getting as fast as i could to get the other companies to take my blackberry software and then build that capital investment around software and become an enterprise software company. they're about an $8 billion cap company today. if they were a software company only in the future they would be substantially more valuable. >> final point here, john. what do you think cab didly is being said in the halls over at coupe upertinoupe eupertino tod? >> i don't think this is particularly of concern to apple. apple has got wonderful products built on a model which is well markets. by the consumer apple has sort of tipped their toe into the enterprise market but aren't really as serious a
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competitor at the level that, you know, they might want to be in the future the. i think apple's big focus has got to be how do they get the right product and price points to be able to continue what they're doing. i'm very optimistic that apple's got great days ahead of it. >> john always good to take to you. a real treat. thanks for your time again. >> thank you, carl. >> john sculley talking research in motion, now blackberry. the change of the name, by the way, will be official on february 4th. look at the markets. dow and s&p hugging awfully close to flat line. indices a little lower after this morning's surprisingly weak gdp number which was a touch negative. still ahead, the ceo of gazelle with his take on how it may go over with consumers but first let's check in with rick santelli and see how the hair cut is going. >> i didn't think i had enough hair for a barber to go this
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long. we're going to talk about in the old days barbers did medical work and that really is the key. is the medicine and the fed working? in about two minutes you'll want to see this. remember this. the barbers of fedville.
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the street." so today we learned first look at fourth quarter gdp down one-tenth of 1%. as many have been pointing out like steve liesman, it isn't as bad as it looks if you're looking at minus when-tenth of
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1%. it is a disappointment. and further using the notion that the government spending is ason or part of the problem, i don't know. that doesn't hold with me because just think about it this way. we had 1.1 trillion of borrowed money, debt increase, deficit increase on the budget numbers for 2012. so roughly we'll say $300 billion was borrowed in the fourth quarter. so let me get this straight. we borrowed $300 billion in the fourth quarter and we end up with a growth rate of down one-tenth of 1%. if you look at third quarter spending by the government, which is one of the issues with this number, it happened to have been up in the third quarter, up in the third quarter, .75%. three-quarters of 1%. i know there are conspiracy theorists out there. i'm not talking about that. i'm just look at it from a
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two-month valuation. let's get to the point. the point of the barbershop scenario, okay? the notion that the fed was right i agree with on the weak economy. the economy is weak. i don't think it's crisis weak, but i think it is weak, so agreement with ben bernanke and the barbers of fedville. here's where i go in a different direction, hence the barber analogy is that if you consider who used to go to barbers, okay? if you were sick and you went to a barber, they would put leeches on you, bloodletting. that's why you had the wheel. if you didn't get better, you'd go back and they'd do the same thing. but is that why the patienting is getting better? with regard to the fed and the weak economy i think is evident to many, even if you can't take your eyes off the dow jones, the s&p or the nasdaq. oneme, going into the sixth year, that is whatever we're doing, the
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blood-letting, the leeches, it isn't working. just because it's weak doesn't mean you do more leeches. it means you re-evaluate. you re-evaluate. there were positives within these numbers. businesses are doing okay in certain areas, even better in others. the stock market might not necessary by be reflecting the economy but it is reflecting what makes america different in other countries. even though there are different aspect, let's build on the issues that differentiate us from europe. you know, we see brian sullen talking about growth. did the santelli exchange about the pie. let's think pie. maybe tomorrow i'll be visiting a bakery. carl, back to you. >> thank you so much. we're now live at the expo room at the blackberry 10 lawn. . this is the room where tech journalists, tech writers will get look at the device hands-on, start using it person to person. we'll bring you more in a minute, bring you the european close and talk about what the 10
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is going to bring to blackberry when "squawk on the street" comes back. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade. when "squawk on the street" two one two. verify and lock. command is locked. five seconds. three, two, one.
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the european markets are closing now. >> and what is interesting at the close of the european markets is how they have taken the news that america didn't grow in the fourth quarter, far worse than we have here. here in the united states, we're flight on our indices. check out the degree to which those guys have fallen, the greatest growth generator in the world. not expanding as they had
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hypoed. obviously that will kick back. the only other thing i will point out, look at italy down there, a real underperformance from italy. it's down 3.4% as you can see. i'll come back to that in a minute. now, tomorrow a lot of the headlines will be focused the fact that we had a spanish gdp figure, which was really poor today. they're contracting at rate of 2.8%. jpmorgan taking a very half-glass-full report on that. in addition, you've not got an accelerated contraction despite the fact that a lot of the fiscal tightening occurred at the end of last year. so i don't know. is it glass half full, glass half empty? the ecb came out with a report today suggesting that across the eurozone bank lending is getting tighter and that will get worse moving forward. however, despite all that, despite all the fundamentals, the euros continue to pound higher, back up to levels we haven't seen since 2001.
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way above $1.35 as you can see. although the economic fundamentals may be bad in europe, the ecb is the only major central bank that's contracting its balance sheet because today was the day that 137 billion euros went back from the private banks to the ecb. and, of course, in the chase for yields, europe arguably is king. the euro is looking strong. that will upset the french and the exhoporters. the first is major profits in europe. there was corruption concerns. the new ceo has said our profits this year will be 80% lower because our contracts in africa and the middle east are not what they were last year. salpem down. and this is the major italian
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energy giant. it has a big stake here. still a lot of concerns with the bank and oil services in italy and the political situation. on the upside today the nordic banks have started reporting notably in -- or the scandinavian banks have started reporting. normally the bank has raised its dividend here. look at it. 10.5%. nor dia is also above expectations. so the banks in the north of europe are doing extremely well. that's the european close. let's check on the equities. share is at the nymex. >> basically flat, trading right around 97.59 for the contract. we did see prices around $98 a bair. some traders are saying they took prices to those highs overnight. but we have seen a bit ofl a pullback and some choppy trading
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since the energy department's report showing nearly 6 million barrels here in the u.s. in the past week. the real outstanding part of the report is what is happening in the gasoline market and therefore the futures market. we're looking at gasoline supplies that fell in the past week even though we saw an uptick and we saw an uptick in demand, a demand up about 3% from where we were a year ago. that is contributing to the rally we're seeing here. gold is also a standout. of course, what's bad for the u.s. economy is good news for the gold. we saw gold gain immediately after that rather poor gdp report for the fourth quarter. so a lot of traders looking to see whether that mean perhaps there'll be more quantitative easing or lowering of rates. and keep an eye on metals. back do you, simon. >> for sure. sharon, thank you very much. it is extraordinary on a day
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that we learn that the american economy didn't grow in the fourth quarter that the stock market has barely moved, bob. >> you know, there's a conspiracy out there some people think. tails you win, heads you win. it was a crummy stock market. 've the bulls were struggling to explain it away. let me talk about why. let me answer the question that everybody keeps asking. why isn't the dow down? there's a couple of things going on. number one, there's huge momentum in stocks right now and that's very difficult to reverse even with a lousy number. secondly, the market tends to rise on fed days could be the third thing and that is the crummy number the feds will continue their stimulus and that may be a big factor here. let me show you. there is an upward bias on fed days here. we've known it for a while, but the s&p 500 is up 65% of the time on the day when the fed has its announcement.
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here's what's really annoying. the following day it's down 60% of the time and the average loss is 0.4%. if you average it out over the two days it's about the same. the numbers don't go anywhere. it's the first day that always really matters. also don't just look at the dow. they're not the only ones. i apologize to dow and everyone watching. i love you guys. the small caps have been on fire. these are much weaker than the overall market. look at the home bibuilders dow almost 1% even though they've had great numbers. look at the order rates for these companies. rylan just came in. 36%, 32%. these are amazing numbers. it has a problem with the valuation. let me show you. this is the problem that ho homebuilders have.
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put up ryland right now and i'll show you what's going on. all of these companies have ridiculous valuations right now. some are trading at two times book. normally they trade one time book or so. there e there's d.r. horton. let's move on. i want to show you one other thing here. what's the big bull trade. the big bull trade i've been talking about the last few weeks, short treasuries, go long cyclical stocks and copper stocks. let's see how it's doing here. so far here's what the ief is. seven-to ten-year treasuries. ire down. cyclicals, this is the cyc index, that's up over 6% and copper up 2.6%. overall it looks like the bull trade seems to be working. aisle keep an eye on this and let you know how it's coming.
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>> do you think the dow will hit 14,000. >> if the historical movement is true, i think it will happen. >> thank you very much. bob pisani. the launch of the new blackberry 10 and carl quintitin is back. >> one indication of how it may sell. when we come back, we'll talk to gazelle, the buyback startup about what they're sealing in terms of blackberry follow up and later on kevin from crack with crackberry swore he would not cut his hair until the 10 was launched. he got his hair cut today. we'll talk to him when "squawk on the street" returns.
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the answer at the top of the hour. will it's go back to carl at the blackberry event. carl? >> thanks, scott. we'll have a talk in a few moments. we're here at the launch in new york city. one good indication of how the 10 might move in terms of volume is how many blackberry users are trying to sell their old models. we're joined today by israel of gazelle. welcome. good to have you on the show. >> thank you. thanks for having me on the show again. >> you're like the leading indicator. what is the interest in trying to sell your old late model blackberry? >> you know, we've seen some really interesting trends in our business in the last couple of months. on the blackberry side, our volume in terms of blackberry tradings has doubled over the last month, and, in fact, over the last week, we receive a 500%
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increase in the blackberry trade-ins. we're seeing a lot of action on the part of the blackberry users. >> put that kind of move into context. is that something you would generally see in front of a norfolk nokia launch, apple launch? >> sure. this is a pretty impressive performance for blackberry, i have to admit that. we saw it around the iphone event and samsung's introduction of its new phone. with didn't know what to expect. we knew about this launch for a long time. we didn't know what to expect. but we're very surprised to see that kind of volume coming in in blackberry. what's interesting, though, i'll note that, while we've seen a kubeling of blackberries we haven't seen the same growth in iphone and android devices which tells you something about who's trading up to other devices. >> that's interesting. you do say you estimate -- i
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love this figure. billion dollars worth of old phone and other devices bought in 2012. 1 billion. you think that's going to go to 5 billion basically in the next two to three years. >> we're seeing a massive increase in the industry. that's really global. if you look at the emerging markets and that's where the demand is for these phones including the blackberry phones, i think it's going do very well in the global markets. we're going to see a demand for 2.5 billion in the next two to three years and that translates to the commerce industry to feed that demand with high-end iphones, high-end android phones and much lower price points because we are bringing to the markets devices. >> it's only been an hour or two since we got the real detail on the 10, but as someone whose business pivots around days like today, right, what is your sense of how innovative the 10 will
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be, how much it's going to get back into the mind of consumer, how much it's going to resurrect r.i.m. or now blackberry as we know it? >> i think blackberry has done a really good job introducing a very good job to narthplace. i like the way it looks, the functionality, the in fact it has an taked screen and keyboard-base device. i think it's going to appeal to its loyal customer base. blackberry is going to have a tough time, especially in the u.s. and other developments markets to appeal to the iphone and android users because, you know, as good as the product was today, it really puts it on par with the other high-end devices. blackberry didn't give them any reason to switch today. so i think they're going to see ongoing challenge in the developed markets. i think in the emerging markets where the competitive landscape
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is wide open, blackberry continues to do fairly well. >> that's well said. we'll see what happens down the road. israel, thanks for your time. good to see you again. when we come back, did thorsten heins succeed today? how is the marketplace going to respond? jon fortt will join us here at the launch in just a moment.
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but when you're buying a device now, you're not buying a device. you're buying an ecosystem as i'm sure you talked about for a while, you're buying access to the device, the marriage between software. it doesn't feel like it's got the mass to compete in that way. i'd be curious to know what jon things. >> i think that's the tough thing that they've got going here. you take a look at google's motorola unit. nice phones, nice designs. they're not selling. these are android phones. it's not that big of a leap for people to switch from one android phone to another. samsung is dominating in that category. so r.i.m.'s got a real hill to climb here. if you want to see the adjustmentable market you can't look at the adjustable base because a lot of people buying the blackberries right now. i have to get used to calling it
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that. you have to look two years ago. who was buying blackberries in north america. those people coming off contract. how many of those people are going go with blackberry 10s. >> right. >> and they've really got to establish a fan base in that group. giets tot be tough. >> speaking of which, dennis, a lot of discussion this morning about alicia keys. their global creative director, i mean the points -- she said something interesting about reaching out to super women and i wonder if this has a gender element to it, demographics. >> i think so. she went to an, powe for android and ios, you'll find all men. it seems like a good play, either explicit or implicit to go for women, but in the end, you know, one of the things that's not been addressed here is that blackberry is competing against companies with immense, immense resources that have immense engineering schedules
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and sources. samsung is refreshing its product every six months, every three months. can blackberry compete in terms of capital and resources to stay afloat. right now i'd say probably not. >> does this feel like something to you that apple could respond to and just bury them the way a major airline responds to a startup in a new market? >> apple's got immess marketing resources. yes, apple's got the super bowl commercial coming out but i think their money is going to contract a bit as we see the service revenues coming down. we have to focus on some enough beyond the corporate market where they say we have apps on this that are just exceptional. i didn't quite hear what that could be for r.i.m. so they might need a little more focus. i don't know if we can take a
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wide shot of the room or not. when you look at the room theri or wrong who doubted it. >> it's the last effort. they're putting tons of money into it. as a personal basis, i would love to see them do well. but you're confronting market dynamics that have changed so measurably. here would be a new thought exercise, if you took the new blackberry phone and called it an htc phone or samsung phone or called it a lenovo phone. how would people feel about it, react to it. would there be such hullabaloo? the only reason is it's taken the company so darn long to produce it. >> well, i don't know that you're giving them enough credit there. think thieb got some features here that are pretty exemptional but go back to when macs were pretty exceptional. that was a great concept. they've really got to prove that they've got staying power maybe
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to catch the next wave. i don't know if they're going to win the surfing competition on the wave they've got now. they need a new wave. >> it's amazing how they do love a comeback story. the emerging markets aside, people would like to see it's raced. >> i would love to see it, but i think long term blackberry will end up in the hands of an asian device manufacturer. call it lenovo, samsung. i think that's where the ultimate wave tackle takes the the beach. >> back with a lot more coverage of the 10 in just a moment. all stations come over to mission a for a final go.
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we are back live from the blackberry 10 launch in lower manhattan. this is a special day not only for the company but for the avid fans of blackberry devices. joins me, the founder of the blog. kevin, good morning to you. >> good morning. >> i all want to say congratulations to you as if you did this. we had you back on in september during jam. >> that's right. >> where today was not a certainty by any means.
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>> no. there was a lot of work to get done and a lot of negative sentiment still at that point and now they brought it back and it's happening. >> how does it feel? >> for blackberry users who have been waiting for a new phone, this is it. right? i mean the thing is what blackberry's always been good at, nobody's had a problem with. great communication, great security. where it had a bad rap is it fell behind on the gaming experience and apps experience. even bet were some of the innovations they're putting into it. we're playing catchup where we fell behind which is great and with some of the things we're pushing in we're pushing the smartphone forward with the true mult


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